8x8, Inc.
May 19, 2010

8x8, Inc. Announces 2010 Fiscal Year-End Operating Results

Reports $0.06 Per Share Net Income; 21% Growth in Revenue From Business Customers

SUNNYVALE, Calif., May 19, 2010 (GlobeNewswire via COMTEX News Network) -- 8x8, Inc. (Nasdaq:EGHT), provider of innovative business communications solutions, today announced financial operating results for its fiscal fourth quarter and year ended March 31, 2010.

Full-Year Financial Results

Net income for fiscal 2010 was $3.9 million or $0.06 per share compared with a net loss of $2.5 million or ($0.04) per share for fiscal 2009. Total revenue for fiscal 2010 was $63.4 million compared with $64.7 million for fiscal 2009. Revenue from business customers grew 21% year over year from $40.2 million in fiscal 2009 to $48.7 million in fiscal 2010 while revenue from residential customers declined 40% from $24.4 million to $14.7 million in fiscal 2010. Revenue from business customers accounted for 77% of the company's total annual revenue, compared with 62% of annual revenue in fiscal 2009.

Fourth Quarter Financial Results

Net income for the fourth quarter of fiscal 2010 was $1.1 million or $0.02 per share compared sequentially to net income of $1 million or $0.02 per share for the previous quarter and a net loss of $3.9 million or ($0.06) per share for the same period of fiscal 2009. Total revenue for the fourth quarter of fiscal 2010 was $15.9 million compared sequentially to $15.9 million for the previous quarter and $15.8 million for the same period of fiscal 2009. In the fourth quarter of fiscal 2010, 8x8 revenue from business customers grew to $13.4 million, a 6% increase over the prior quarter and 25% increase over the same period last year and accounted for 85% of total revenue in the fourth quarter of fiscal 2010 compared to 79% in the prior quarter and 68% in the same period last year. Revenue from residential customers declined 27% in the fourth quarter of fiscal 2010 to $2.4 million from $3.3 million in the prior quarter.

During the fourth quarter of fiscal 2010, 8x8 added a record 29,985 new business lines and services, up 14% from the prior quarter and 35% from the same period last year. Average lines and services per new business customer increased to a record 10.4 compared to 9.5 in the prior quarter and 8.0 in the same year ago period. 8x8 added 2,875 gross new business customers during the fourth quarter, compared with 2,785 customers in the prior quarter, and ended the fourth quarter of fiscal 2010 with a total of 20,428 business customers.

"8x8 continues to generate robust growth in its core business customer service revenue," said Bryan Martin, 8x8's Chairman and Chief Executive Officer. "As demonstrated by our performance of sequential business customer revenue growth over the past three years, we believe the impact of the current economic climate has been minimal on this revenue stream. We expect this trend to continue going forward, potentially enhanced through select acquisitions that can expand our product service offerings into our business customer base. Our ability to expand this recurring base of revenue has enabled us to generate predictable profitability and strengthen our balance sheet, positioning 8x8 for continued success in fiscal 2011 and beyond."

Balance Sheet Highlights

Cash and cash equivalents increased to $18.1 million in the fourth quarter of fiscal 2010 from $17.1 million in the previous quarter and $16.4 million in the same period of fiscal 2009.

Subsequent Events

In April 2010, 8x8 sold its wholly-owned French research and development subsidiary, 8x8 Europe, SARL, to Stonyfish, a privately-held company in Los Altos, California. 8x8 also invested $250,000 cash in the new venture and granted a non-exclusive license to certain 8x8 technology. 8x8 will own 17% of Stonyfish following its initial round of external fundraising. All 8x8 research and development activities will remain at the Company's Sunnyvale, California headquarters under the leadership of 8x8 Chief Technology Officer Ramprakash Narayanaswamy.

In May 2010, 8x8 acquired Central Host, Inc., a Los Gatos, California company, for $1.6 million in a combination of cash and unregistered 8x8 common stock. Central Host provides customized, high-performance, managed hosting and cloud-based computing solutions targeted at small and medium sized enterprises. Central Host has relocated to 8x8's Sunnyvale, California headquarters and will combine its operations with 8x8's existing Network Operations Center (NOC), sales and customer service operations. Central Host's services compliment the current suite of hosted business communication services 8x8 offers to its more than 20,000 business customers.

"8x8 continues to expand its portfolio of hosted, profitable services for small businesses with the acquisition of Central Host," added Mr. Martin. "Central Host has built a loyal customer base and provides 8x8 with differentiated IT hosting services, which we will market to both existing and new business customers, further expanding our technological lead in the marketplace."

Financial and Business Highlights:

  --  Posted record annual net income of $3.9 million or $0.06 per share for
      fiscal 2010compared with a net loss of $2.5 million or ($0.04) per share
      for fiscal 2009

  --  Posted net income of $1.1 million or $0.02 per share for the fourth
      quarter of fiscal 2010, compared sequentially to net income of $1
      million or $0.02 per share for the previous quarter and a net loss of
      $3.9 million or ($0.06) per share for the same period of fiscal 2009.
      The Company has generated net income in nine of the last ten quarters

  --  Increased revenue from business customers to 85% of total revenue -- up
      from 79% in the prior quarter

  --  Sold a record number of 29,985 new business lines and services in the
      fourth quarter of fiscal 2010, up 14% from the prior quarter and 35%
      from the same period last year

  --  Added $1.7 million year-over-year and $986,000 quarter over quarter in
      cash and cash equivalents to the Company's balance sheet

  --  Launched new 8x8 Virtual Office Pro unified communications solution in
      January - 4,348 subscriptions at the end of fiscal year 2010

  --  Acquired Central Host, Inc., a managed hosting company, in May 2010 to
      broaden the Company's business services portfolio


Conference Call Information

Management will host a conference call to discuss these results and other matters related to the Company's business today, May 19, 2010, at 4:30 p.m. EDT. The call is accessible via the following numbers and webcast link:

  Dial In:        (877) 843-0417, domestic
                  (408) 427-3791, international
  Replay:         (800) 642-1687, domestic (Conference ID 71854752)
                  (706) 645-9291, international (Conference ID 71854752)
  Webcast:        http://investors.8x8.com/

About 8x8, Inc.

8x8, Inc. (Nasdaq:EGHT) leverages its patented software technologies to deliver high quality voice solutions and integrated messaging and video to businesses of any size with employees in any locations on a wide variety of business telephony, web and mobile platforms. 8x8 also offers managed hosting and cloud-based computing services. For additional information, visit www.8x8.com.

Forward Looking Statements

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. These statements include, without limitation, information about future events based on current expectations, potential product development efforts, near and long-term objectives, potential new business, strategies, organization changes, changing markets, future business performance and outlook. Such statements are predictions only, and actual events or results could differ materially from those made in any forward-looking statements due to a number of risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to, customer acceptance and demand for our products and services, the reliability of our services, the prices for our services, customer renewal rates, customer acquisition costs, actions by our competitors, including price reductions for their telephone services, potential federal and state regulatory actions, compliance costs, potential warranty claims and product defects, our needs for and the availability of adequate working capital, our ability to innovate technologically, the timely supply of products by our contract manufacturers, potential future intellectual property infringement claims that could adversely affect our business and operating results, and our ability to retain our listing on the NASDAQ Capital Market. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that 8x8, Inc. files from time to time with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and 8x8, Inc. undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

NOTE: 8x8, the 8x8 logo, 8x8 Virtual Office, 8x8 Virtual Office Pro, 8x8 Complete Contact Center and 8x8 Mobiletalk are trademarks of 8x8, Inc. All other trademarks are the property of their respective owners.

                                     8x8, Inc.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts; unaudited)


                                     Three Months Ended     Twelve Months Ended
                                          March 31,              March 31,
                                    ---------------------  ---------------------

                                       2010       2009        2010       2009
                                    ---------  ----------  ---------  ----------
  Service revenues                   $ 14,588    $ 14,198   $ 58,683    $ 58,486

  Product revenues                      1,279       1,567      4,713       6,188
                                    ---------  ----------  ---------  ----------

    Total revenues                     15,867      15,765     63,396      64,674
                                    ---------  ----------  ---------  ----------

  Operating expenses:
   Cost of service revenues             3,309       4,179     13,599      15,714
   Cost of product revenues             1,825       2,349      7,257       7,135
   Research and development             1,308       1,538      5,049       5,212
   Selling, general and
    administrative                      8,536      11,700     33,516      39,680
                                    ---------  ----------  ---------  ----------

    Total operating expenses           14,978      19,766     59,421      67,741
                                    ---------  ----------  ---------  ----------
  Income (loss) from operations           889     (4,001)      3,975     (3,067)
  Other income, net                         3          32         53         298
  Income (loss) on change in
   fair value of warrant
   liability                              216        (11)      (146)         314
                                    ---------  ----------  ---------  ----------
  Income (loss) before
   provision for income taxes           1,108     (3,980)      3,882     (2,455)
  Provision (benefit) for
   income taxes                           (7)        (68)          3          45
                                    ---------  ----------  ---------  ----------

  Net income (loss)                   $ 1,115   $ (3,912)    $ 3,879   $ (2,500)
                                    =========  ==========  =========  ==========

  Net income (loss) per share:
   Basic                               $ 0.02    $ (0.06)     $ 0.06    $ (0.04)
   Diluted                             $ 0.02    $ (0.06)     $ 0.06    $ (0.04)

  Weighted average number of
   shares:
   Basic                               63,064      62,568     62,861      62,317
   Diluted                             63,992      62,568     63,262      62,317

                        8x8, Inc.
          CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, unaudited)




                                March 31,     March 31,

                                   2010          2009
                                ---------     ---------
  ASSETS
  Current assets
   Cash and cash
    equivalents                  $ 18,056      $ 16,376
   Accounts receivable, net           554           414
   Inventory                        2,174         2,297

   Other current assets               665           841
                                ---------     ---------
    Total current assets           21,449        19,928
  Property and equipment,
   net                              1,871         1,485

  Other assets                        392           443
                                ---------  -  ---------

     Total assets                $ 23,712      $ 21,856
                                =========     =========

  LIABILITIES AND
   STOCKHOLDERS' EQUITY
  Current liabilities
   Accounts payable               $ 3,780       $ 4,810
   Accrued compensation             1,444         1,264
   Accrued warranty                   331           328
   Deferred revenue                 1,310         2,254
   Other accrued
    liabilities                     3,269         3,858
                                ---------     ---------
    Total current
     liabilities                   10,134        12,514

  Other liabilities                   111           291
  Fair value of warrant
   liability                          167            21
                                ---------     ---------
     Total liabilities             10,412        12,826

  Total stockholders'
   equity                          13,300         9,030
                                ---------     ---------
     Total liabilities and
      stockholders' equity       $ 23,712      $ 21,856
                                =========     =========

                                                         8x8, Inc.
                                               Selected Operating Statistics


                                  --------------------------------------------------------------------------------------

                                    FQ109      FQ209      FQ309      FQ409      FQ110      FQ210      FQ310      FQ410
                                  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
  Gross business customer
   additions (1)                      2,398      3,324      2,437      2,792      2,907      2,609      2,785      2,875
  Gross business customer
   cancellations (less
   cancellations within 30 days
   of sign-up)                        1,098      1,187      1,224      1,245      1,371      1,416      1,331      1,616
  Business customer churn (less
   cancellations within 30 days
   of sign-up) (2)                     3.2%       3.1%       2.9%       2.7%       2.7%       2.7%       2.4%       2.7%
  Total business customers (3)       11,898     13,744     14,706     16,013     17,266     18,199     19,407     20,428

  Business customer average
   monthly service revenue per
   customer (4)                       $ 237      $ 220      $ 208      $ 202      $ 196      $ 201      $ 204      $ 204

  Service revenue from business
   customers (in '000s)             $ 8,073    $ 8,466    $ 8,883    $ 9,293    $ 9,787   $ 10,714   $ 11,494   $ 12,182
  Product revenue from business
   customers (in '000s)             $ 1,004    $ 1,360    $ 1,731    $ 1,435      $ 935    $ 1,128    $ 1,156    $ 1,266
                                  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
   Total revenue from business
    customers (in '000s)            $ 9,077    $ 9,826   $ 10,614   $ 10,728   $ 10,722   $ 11,842   $ 12,650   $ 13,448
                                  =========  =========  =========  =========  =========  =========  =========  =========

  Revenue from business
   customers (in '000s)             $ 9,077    $ 9,826   $ 10,614   $ 10,728   $ 10,722   $ 11,842   $ 12,650   $ 13,448
  Revenue from residential
   customers (in '000s)             $ 7,192    $ 6,356    $ 5,572    $ 5,236    $ 4,811    $ 4,168    $ 3,278    $ 2,396
  Revenue from technology
   licensing (in '000s)                $ 12      $ 243       $ 17    $ (199)       $ 25       $ 17       $ 16       $ 23
                                  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

   Total Revenue                   $ 16,281   $ 16,425   $ 16,203   $ 15,765   $ 15,558   $ 16,027   $ 15,944   $ 15,867
                                  =========  =========  =========  =========  =========  =========  =========  =========

  Percentage of revenue from
   business customers                 55.8%      59.8%      65.5%      68.1%      68.9%      73.9%      79.3%      84.8%
  Percentage of revenue from
   residential customers              44.1%      38.7%      34.4%      33.2%      30.9%      26.0%      20.6%      15.1%
  Percentage of revenue from
   technology licensing                0.1%       1.5%       0.1%      -1.3%       0.2%       0.1%       0.1%       0.1%
                                  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

   Total Revenue                     100.0%     100.0%     100.0%     100.0%     100.0%     100.0%     100.0%     100.0%
                                  =========  =========  =========  =========  =========  =========  =========  =========

  Overall service margin                75%        73%        74%        71%        76%        76%        78%        77%
  Overall product margin               -13%       -10%         9%       -50%       -75%       -42%       -59%       -43%
   Overall gross margin                 68%        65%        67%        59%        66%        67%        68%        68%

  Total (business and
   residential) subscriber
   acquisition cost per service
   (5)                                $ 162      $ 163      $ 135      $ 119      $ 108       $ 88      $ 102       $ 97
  Business subscriber
   acquisition cost per service
   (6)                                $ 171      $ 171      $ 141      $ 118       $ 93       $ 90      $ 102       $ 97
  Average number of services
   subscribed to per business
   customer                             7.1        6.9        6.6        6.6        6.9        7.1        7.3        7.5
  Business customer subscriber
   acquisition cost (7)             $ 1,217    $ 1,174      $ 933      $ 785      $ 638      $ 638      $ 749      $ 723

  (1) Includes 1,154 "Find me, Follow me" and 40 8x8 Virtual Office customers acquired in the second quarter of fiscal
   2009 from Avtex Solutions, LLC ("Avtex").
  (2) Business customer churn is calculated by dividing the number of business customers that terminated (after the
   expiration of the 30-day trial) during that period by the simple average number of business customers during the
   period and dividing the result by the number of months in the period. The simple average number of business customers
   during the period is the number of business customers on the first day of the period plus the number of business
   customers on the last day of the period divided by two.
  (3) Business customers are defined as customers paying for service. Customers that have prepaid for their first month
   of service and are currently in the 30-day trial period are considered to be customers that are paying for service.
  (4) Business customer average monthly service revenue per customer is service revenue from business customers in the
   period divided by the number of months in the period divided by the simple average number of business customers
   during the period.
  (5) Total (business and residential) subscriber acquisition cost per service is defined as the combined costs of
   advertising, marketing, promotions, commissions and equipment subsidies during the period divided by the number of
   gross services added during the period.
  (6) Business subscriber acquisition cost per service is defined as the combined costs of advertising, marketing,
   promotions, commissions and equipment subsidies for business services sold during the period divided by the number of
   gross business services added during the period. The addition of 1,154 Avtex customers that migrated to 8x8 in the
   second fiscal quarter of 2009 but subscribed to "Find me, Follow me" services rather than 8x8 Virtual Office service,
   and the $79,230 in expense related to the acquisition of these 1,154 customers, is excluded from this calculation.
  (7) Business customer subscriber acquisition cost is business subscriber acquisition cost per service times the
   average number of services subscribed to per business customer.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: 8x8 Inc.

CONTACT:  8x8 Inc.
Joan Citelli
(408) 654-0970
jcitelli@8x8.com

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